Gazprom Cuts Gas Shipments to Belarus by 30%, Demands Payment

By Anna Shiryaevskaya

June 22 (Bloomberg) -- OAO Gazprom cut gas supplies to Belarus further today, demanding $192 million in payment for past deliveries, and saying the western neighbor may siphon off some of Russia's Europe-bound exports of the fuel.

"Belarus has taken no steps toward paying their debt for Russian gas deliveries," Chief Executive Officer Alexei Miller said on the Gazprom-controlled NTV television channel. At 10 a.m., the Moscow-based gas export monopoly began "limiting the planned daily shipment by 30 percent, with subsequent increases in the reduction to a level proportionate to the debt."

Russia supplies a quarter of Europe's gas via Belarus and Ukraine. Gazprom threatened to cut supplies to Belarus in January 2007, averted by a last-minute accord that more than doubled the fuel price. The company has also halted supplies to Ukraine, twice disrupting deliveries to Europe twice during freezing weather since early 2006, raising concerns about the reliability of Russian fuel supplies.

Gazprom spokesman Sergei Kupriyanov said Belarusian First Deputy Prime Minister Vladimir Semashko threatened in a letter to siphon off some Europe-bound gas if its supplies were reduced further. Daily shipments may be cut by as much as 85 percent, Miller said yesterday.

The debt Gazprom is claiming from Belarus may rise to $251 million when the payment for May supplies comes due on June 23, Kupriyanov said yesterday.

Belarus yesterday offered to repay $187 million by July 5, Interfax reported, citing Belarusian Deputy Energy Minister Eduard Tovpenets.

"No one will wait two weeks," Kupriyanov said yesterday. The Russian gas producer owes Belarus a "comparable" debt for transit after the country blocked payments this year by refusing to sign invoices, he said.

Belarus was set to carry more than 20 percent of Gazprom's Europe-bound exports of the fuel this year, according to the company.

--Editors: Torrey Clark, Randall Hackley


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